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PUBLICATION: GSA BUSINESS
DATE: 02-04-2008
HEADLINE: Global trends have jobs coming, going


Global trends have jobs coming, going

Chinese manufacturer arrives as Upstate plants close

RICHARD BREEN, EDnOR

China giveth and China taketh away?

In the span of three days in Januaiy, two Upstate plcint-closing announcements were made, resulting in the loss of 775 jobs. Global competition was mentioned in both cases, with a direct reference to China in one.

One week later, however, the S.C, Department of Commerce announced that American Yuncheng Plate Mciking Inc. would build a manufacturing facility in Spartanburg. The Chinese company

See Trends page 6

plans to invest $10 million and create 120 jobs in its first five years.

So, which side of the Chinese trade debate should the GSA area be on?

'Tou're going to see more and more commodity products built in low-cost areas," says Hal Johnson, president and chief executive of the Upstate Alliance,

The Upstate Alliance took an economic development marketing trip to China late in 2006. One of the group's presentations was to economic development officials from Tianjin, a metropolitan province of 10,2 million.

Johnson says that during his talk, he mentioned that 12,000 Upstate manufacturing jobs had been lost over the previous five years.

"They said, 'that's a lot of jobs,' " Johnson recalls, but then they added that Tianjin had lost 120,000 manufacturing jobs to Vietnam in the previous year alone.

"Soon, Vietnam will lose them to someone else," Johnson says. "It's a vicious cycle."

Commerce Department officials say the impact of foreign competition differs from industry to industry,

"Competing with China is no different

thcin competing against another country - or another company," says Jack Ellenberg, deputy secretary for new investment. "There are opportimities eind there are challenges."

The state seized an opportunity by establishing an office in Shanghai, which is staffed by John Ling.

"I think we are really ahead of the curve in that regard," says Kara Borie, a Commerce Department spokeswoman.

The Commerce Department also has offices in Canada, Germany and Japan.

"We routinely say that South Carolina leads the nation as far eis foreign direct investment per capita," Ellenberg says. "That is no accident."

The first Chinese firm to locate in South Carolina was The Haier Group, an electronics conglomerate that built a $40 million manufacturing facility in Camden. "We feel Uke they have been an outstanding corporate citizen," Ellenberg says.

Yuncheng Plate Making Group's entiy into the Upstate was preceded by Greenville Glass Industries Inc., a subsidiary of automotive and industrial glass manufacturer Fuyao Gleiss Industry Group Co.

Vivian Wong, who assisted Yuncheng Plate Making Group in establishing its American presence, says the SpartJinburg facility could grow beyond the initial announcement,

"It's a huge company in China emd it's a very solid company," says Wong, who is chief executive of Greenville-based Pacific Gateway Capital Group LLC, which facilitates business between American and Chinese companies.

Yuncheng Plate Making Group was founded in 4982 and has branches in 10 countries, but the Spartanburg facility will be its first in North America.

"It's a good thing that they're finally in and they're finally announcing," says Johnson, who met with Yuncheng Plate Making Group during the 2006 Upstate Alliance mission. "It's a great example of teeunwork."

American Yuncheng Plate Making plans to start construction on a 30,000-square-foot facility early this year. It will make engraved printed cylinders used for packaging, decoration, and textile transfers.

By the time it opens, another Spartanburg production facility will have

closed its doors. Minnesota-based Schwan's Global Supply Chain Inc. announced it would shutter its Mrs. Smith's facility on Hearon Circle by the end of March.

The 525-employee facility, which makes pies and cakes, will be consolidated into other Schwan locations.

"We had too much capacity," says Bill McCormack, senior vice president.

While he was reported by other media outlets as having mentioned global competition, he says that was more of a generic reference them a specific trade issue.

"Competition is always heating up," McCormack says. "It behooves all of us to look at ways we can be more efficient."

Meanwhile, in Easley, Alice Manufacturing Co. plans to close its Foster Plant, which employs 250, March 14. The announcement made a direct reference to China's growing textile industry.

By the same token, the einnouncement mentioned Alice Memufacturing's Ellison Plant, which the company says "produces higher-end home furnishing products." That facility is adding capacity - and up to 60 new jobs.

As 2008 progresses, economic development officials see opportunities to take advantage of the weak dollar. Ellenberg says that for foreign companies already shipping to the United States, it may make financial sense to build a U.S. facility. Johnson says he's already seen a spike in companies showing interest in the Upstate.

"People are building plants where they've got market to sell product," he says, ®